The latest total value sales data from Britain’s Builders’ Merchants show a continuation of the strong growth seen throughout 2021, as Q3 recorded the second-highest quarterly BMBI sales ever, just 2.4% behind Q2’s record breaking figures.
However, there are signs of a slowdown as volume growth gives way to value growth, driven by price increases.
Total value sales in Q3 2021 were 17.2% higher than Q3 2020, with one less trading day this year. Eleven out of the 12 product categories sold more over the period. Timber & Joinery Products led the field (+43.9%) with its highest-ever quarterly BMBI sales, contributing significantly to overall growth. Excluding Timber, total merchant sales still grew by 9.6%. Like-for-like-sales increased by 19.1%.
Comparing Q3 2021 with Q3 2019, a more normal pre-Covid year, overall value sales were up 18.4% with one less trading day this year. Six categories sold more, led by Timber & Joinery Products (+48.9%) and Landscaping (+30.2%). Like-for-like sales were up 20.2%.
John Newcomb, CEO of the BMF, said: “Reports from the wider construction market are beginning to show the effect of ongoing supply chain issues, which this quarter have been further exacerbated by a shortage of HGV drivers and significant cost pressures on manufacturers.
"However, by working closely and collaboratively, the supply chain continues to manage these challenges. Provisional figures from the Office of National Statistics (ONS) reveal a curate’segg of results for Q3 2021, with two months of falling output before volumes increased in September.
“September saw monthly construction output grow in volume terms by 1.3%, with increases in both RMI (+1.2%) and new work (+1.3%). However, month on month declines in both July and August led to a 1.5% overall fall in Q3 2021 construction growth compared with Q2 2021. This is the first quarterly fall following four successive quarters of growth.
“The ONS noted anecdotal evidence of supply chain issues affecting output, with reports of healthy order books but availability of certain construction products affecting projects currently underway. Supply chain issues are also reported in the Federation of Master Builder’s(FMB) Q3 State of Trade, which focuses on SME firms. This found 89% facing delays due to either material or skilled labour shortages. The vast majority, 97%, had experienced material price rises, with 93% expecting this situation to continue next year.
“On a positive note, 55% of FMB respondents reported higher workloads in Q3 over Q2 2021 (with just 8% lower) and 56% reported more enquiries for future work (15% lower). This is only a slight dip on Q2 with enquiries returning towards pre-pandemic levels after an exceptionally strong period.
“The latest NHBC figures are also positive. Headline results show 33,779 new homes registered in Q3 2023, an increase of 14% on the same period last year. There has also been a shift towards larger homes since the start of the pandemic, with detached properties representing 36% of new homes registered in Q3 2021, the highest proportion of registrations this quarter."
Commenting on the latest figures Emile van der Ryst, Senior Client Insight Manager - Trade, GfK, said: “The final quarter of the year should see further sales easing, but still moving along very well. Supply chain issues are reducing, but wider UK market sentiment suggests this could persist until 2023. Pricing will most likely continue to drive any value growth.
“It’s safe to say that the final year figures will be noticeably ahead of initial forecasts, but we expect that 2022 will see a decline against this most exceptional year.”
The Builders Merchant Building Index (BMBI) tracks builders’ merchants’ actual sales to builders and contractors using GfK’s Builders’ Merchant Point of Sale Tracking Data. The BMBI represents over 80% of the value of the builders' merchants' market.
